SIE practice questionmediumETFs
What is an advantage of ETFs over traditional mutual funds?
- AGuaranteed principal protection
- BAbility to trade intraday at current market prices✓ Correct answer
- CNo management fees
- DNo risk of tracking error
Explanation
Why B — Ability to trade intraday at current market prices
ETFs can trade intraday at current market prices, unlike traditional mutual funds that price once per day at NAV. ETFs do not guarantee principal, can charge management fees, and can have tracking error.
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